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Brandon S. v. State ex rel Foster Family Home and Small Family Home Insurance Fund

June 3, 2009

BRANDON S., A MINOR, ETC., PLAINTIFF AND APPELLANT,
v.
THE STATE OF CALIFORNIA EX REL. FOSTER FAMILY HOME AND SMALL FAMILY HOME INSURANCE FUND, DEFENDANT AND RESPONDENT.



APPEAL from a judgment of the Superior Court of Los Angeles County, Elihu M. Berle, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC333074).

The opinion of the court was delivered by: Willhite, J.

CERTIFIED FOR PARTIAL PUBLICATION*fn1

INTRODUCTION

In response to the inability of foster parents to obtain insurance for claims arising from foster parent activities, the Legislature created the Foster Family Home and Small Family Home Insurance Fund (the Fund). (Health & Saf. Code, § 1527 et seq.)*fn2 The Fund has the statutory obligation, subject to procedural and financial limitations, to pay claims filed by foster children against foster parents for occurrences arising from the foster-care relationship. However, the Legislature limited the Fund‟s liability by enacting section 1527.3 to exclude coverage for eight classes of claims. At issue here is the exclusion of subdivision (a), under which the Fund is not liable for "[a]ny loss arising out of a dishonest, fraudulent, criminal, or intentional act." (Italics added.)

Appellant Brandon S., a foster child, was molested by the stepson of his licensed foster mother, Monique M. Through his guardian ad litem, he filed a claim with the Fund, alleging that Monique M.‟s negligent supervision resulted in the molestation. He sought damages for emotional and physical injuries caused by the molestation. Based on the exclusion for "[a]ny loss arising out of a... criminal act" (§ 1527.3, subd. (a)), the Fund denied the claim. Brandon then filed a complaint in the superior court for declaratory relief against the Fund and for negligent supervision against Monique M. Following Monique M.‟s default, the court held a bench trial on Brandon‟s declaratory relief claim against the Fund, and also heard his default prove up against Monique M. The court awarded Brandon $250,000 in damages against Monique M., but ruled that the Fund had no liability based upon the statutory exclusion of section 1527.3, subdivision (a).

On appeal, Brandon contends that the statutory exclusion does not apply to claims arising from a third party‟s criminal conduct. Rather, he construes the statute to bar claims arising only from criminal conduct of a foster parent. We disagree. The unambiguous language of the statute bars any loss arising from a criminal act, whether the act was committed by the foster parent or a third party. Indeed, in four other subdivisions of section 1527.3, the Legislature expressly tied the specified exclusions to conduct by the foster parent. That the Legislature did not so limit the exclusion of subdivision (a) suggests that the omission was intentional. Moreover, nothing in the relevant legislative history supports Brandon‟s interpretation of the statute. Further, when creating the Fund, the Legislature also sought to deal with the insurance crisis by enacting Insurance Code section 676.2, now Insurance Code section 676.7, to ensure that foster parents will have access to homeowner‟s, tenant‟s, and liability insurance, including liability coverage for the type of claim involved here. We hold, therefore, that section 1527.3, subdivision (a), precludes the Fund‟s liability for losses caused by criminal acts, whether committed by the foster parent or a third party.

Brandon further contends that the trial court‟s ruling violates equal protection. Because Brandon did not raise this claim below, it has been forfeited. Lastly, Brandon urges that the trial court awarded him insufficient damages in his action against Monique M. In the non-published portion of this opinion, we reject that claim. We therefore affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

The parties presented the case on the following stipulated facts. Brandon is a dependent of the juvenile court (Welf. & Inst. Code, § 300). In July 2003, when he was nearly 12 years old, he was placed in a licensed foster home operated by Monique M. Three other dependent minors also resided there. Monique M.‟s 13-year old stepson Eric B. regularly visited the home. During these visits, Eric B. sexually molested Brandon and two of the other children living there.

In February 2004, the police arrested Eric B. Brandon was removed from the home. Proceedings were commenced against Eric B. in juvenile court (Welf. & Inst. Code, § 602), resulting in Eric B.‟s admission that he had committed a lewd act on a child under 14 years of age. (Pen. Code, § 288, subd. (a).) The Department of Social Services revoked Monique M.‟s license, finding that she provided negligent supervision for the children under her care.

Brandon, through his guardian ad litem, filed a claim with the Fund in which he sought damages for "[e]motional and physical injuries" arising from the molestation, and alleged that Monique M.‟s negligent supervision caused the molestation. The Fund denied the claim, relying on the exclusion of section 1527.3, subdivision (a). Brandon then filed suit in superior court in which he alleged a cause of action against Monique M. for negligent supervision and sought declaratory relief that the Fund was obligated to pay his claim for damages arising out of Monique M.‟s negligence.*fn3 Monique M. failed to respond and a default was entered against her.

At a combined default prove up against the Monique M. and declaratory relief trial against the Fund, two issues were presented for the trial court to resolve. The first was the legal issue whether the Fund was liable for Brandon‟s claim. The trial court concluded that the statutory exclusion under section 1527.3, subdivision (a), for any loss arising out of a criminal act precluded the Fund‟s liability because Brandon‟s damages directly arose from Eric B.‟s criminal sexual molestation. The second issue was factual: whether Monique M. was liable to Brandon based on her negligent supervision. The trial court found that she had been negligent in leaving Brandon unsupervised in the care of Eric B. who then sexually molested him. The court awarded Brandon $250,000 in damages against Monique M.*fn4

This appeal by Brandon follows.

DISCUSSION

1. Historical Background

In 1986, the Legislature recognized that a crisis existed in the ability of foster family homes and small family homes to obtain homeowner‟s, renter‟s, and liability insurance to cover the rising number of claims made against them by foster children and their parents or legal guardians.*fn5 The Legislature further recognized that this inability put the personal assets of foster parents at risk and imperiled the foster care system. (§ 1527, stats. 1986, ch. 1330; see Hill v. Newkirk (1994) 26 Cal.App.4th 1047, 1052.) The Legislature addressed these problems in two interrelated ways.

First, the Legislature created the Fund by adding section 1527, et seq., to the Health and Safety Code. "The purpose of the fund is to pay, on behalf of foster family homes and small family homes..., claims of foster children, their parents, guardians, or guardians ad litem resulting from occurrences peculiar to the foster-care relationship and the provision of foster-care services." (§ 1527.1.) Thus, section 1527.2 provides in relevant part that "[t]he fund, subject to this article, shall pay, on behalf of foster family homes and small family homes, any claims of foster children, their parents, guardians, or guardians ad litem for damages arising from, and peculiar to, the foster-care relationship and the provision of foster-care services, or shall reimburse foster family homes and small family homes for those damages."

Section 1527.6 requires a claimant to file a claim with the Fund "within the applicable period of limitations for the appropriate civil action underlying the claim" (§ 1527.6, subd. (b)), and forbids any civil action against the foster parent unless such a claim has been rejected, or has been approved and paid and damages in excess of the payment are sought (§ 1527.6, subd. (d).) Section 1527.5 provides: "The fund shall be liable, if a claim is approved, to pay on behalf of each licensed foster family home or small family home, all sums which the foster family home or small family home is obligated to pay as a result of a valid claim of bodily injury or personal injury arising out of the activities of a foster parent or foster parents, which occurs while the foster child resides in the foster family home or small family home. Claims specified in this section of a foster child or a parent, guardian, or guardian ad litem of a foster child shall be the sole responsibility of the fund."

In creating the Fund, however, the Legislature limited amount of the Fund‟s liability, and the classes of claims for which the Fund is liable. Section 1527.4 provides: "Notwithstanding any other provision of this article, the fund shall not be liable for damages in excess of three hundred thousand dollars ($300,000) for any single foster family home... for all claims arising due to one or more occurrences during a single calendar year." Moreover, the Legislature excluded coverage for eight classes of classes of claims. Section 1527.3 provides:

"The fund shall not be liable for any of the following:

"(a) Any loss arising out of a dishonest, fraudulent, criminal, ...


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